Key points:
- The Isle of Man FIU has published typologies to help detect financial crimes in online gambling
- Methods include laundering through gameplay, crypto transactions and collusive betting
- Criminals may use complex corporate structures and licences to present illicit funds as legitimate
The Isle of Man Financial Intelligence Unit (FIU) has released a new report outlining typologies and red flags associated with the misuse of online gambling platforms for money laundering (ML), terrorist financing (TF) and proliferation financing (PF).
The publication is part of the FIU’s commitment to international standards under FATF Recommendation 29 and aims to help industry stakeholders detect and mitigate financial crime risks.
Online gambling represents a significant part of the Isle of Man’s economy, contributing approximately 14% of national income. Licensed under the Online Gambling Regulation Act 2001 (OGRA), operators are required to comply with AML and CFT obligations depending on their licensing model – ranging from full to sub-licences, and software supplier roles.
The report outlines how criminals exploit the anonymity, speed and cross-border nature of online gambling. Common techniques include "cash in, cash out" schemes to launder illicit funds, parallel betting by colluding actors, chip dumping in P2P games to transfer funds and the misuse of fake identities to withdraw money via alternative methods.
Good to know: A growing concern is the laundering of cryptocurrencies through gambling accounts, often linked to darknet activity and sanctioned states such as North Korea
Organised criminal groups are also reported to operate or infiltrate gambling businesses to launder money under the guise of legitimate profits. Complex corporate structures, shell companies and manipulated B2B transactions are among the mechanisms used to obscure ownership and financial flows.
The FIU’s guide includes red flag indicators, case examples and risk factors, offering practical support to gambling operators, financial institutions and service providers.
The report ultimately stresses the need for continuous monitoring and due diligence, particularly when dealing with clients or transactions involving high-risk jurisdictions.
